Singaporeans love travelling. However, despite travelling being near the top of our priority list, the slightest task of purchasing foreign currency at the money changer could be challenging for some people.
Here is a quick crash course on what you need to know before heading to the money changer during this holiday season to get your hands on the foreign currency you need.
1. Buy or Sell? Which Column Should You Look At?
Despite this being a repeated process for most people, some of us are still guilty of staring at the currency exchange board at the money changer, and trying to figure out which rates we should be looking at. It is embarrassing, but we still cannot tell whether we should be looking at the “buy” or the “sell” column.
Here is how you can understand it once and for all. Ask yourself if you are buying a foreign currency using the Singapore Dollar, or if you are selling the foreign currency you have for the Singapore Dollar.
Assuming you are travelling to the US, below is what you will see at the exchange board.
So if you wish to change your SGD currency to USD currency, it means you are “buying” the USD with SGD. This makes you the buyer, and the money changer, the seller.
Hence the money changer is selling you the USD currency. You should look at the column, “We Sell”
A quick method to check if you are looking at the correct rate will be to convert the SGD in your hands with both rates. Whichever rate results in you having less of the foreign currency would be the correct one.
2. Rates On Internet Vs Actual Rates You Receive
Always account for a little difference between the rates you see online and the rates you are actually able to exchange for at the money changer.
An example will be the rate for Australian Dollar and Singapore Dollar. As of 24 November 2015, 1 Australian Dollar is to 1.02 Singapore Dollar. A quick search on the Mustafa’s website gave a rate of 1 Australian Dollar is to 1.01 Singapore Dollar (for buying) and 1 is to 1.03 Singapore Dollar (for selling). This difference is what we call a spread. This spread is how money changers make money.
3. Money changer with the best rates
It is frustrating at times to be receiving lousy exchange rates while all your travelling companions somehow get better rates than you. Knowing the best place to purchase your foreign currency will save you money, especially when you are exchanging a relative big amount.
To save you some time, we will point you in the 3 locations where the rates are relative fair in Singapore:
- The Arcade at Raffles Place
- People’s Park Complex
You are welcome.